the lines look prominent because you are sanding along the edge of the guitar - the direction of the marks - left to right in the bottom pic
the grain, however is more circular and really more vertical in this case.
for the heal of the guitar pictured, you would probably get a better result sanding up and down, across the thickness of the guitar - up and down in the bottom pic..
you can continue the way you are going, but may get a better result going the other way here.
what you have is sanding scratches and yes they will reduce with successive grades of paper.
raised fibres when wet will look and feel "fuzzy" , and easily dealt with the next sand
you are making great progress, sand on!